VOLUME 3, NUMBER 1
THE GEOGRAPHY OF FOREIGN DIRECT INVESTMENT: A TRIPARTITE FRAMEWORK
Douglas van den Berghe and Rob van Tulder
Patterns in Foreign Direct Investment (FDI) over the 1990s reveal three internationalization strategies: classic internationalization, emerging internationalization and competitive internationalization. The evolving tripartite framework enables to position internationalization strategies, FDI theories and, a number of emerging issues related to FDI and globalization in their geographical context. The three internationalization strategies simultaneously shape, although not necessarily to the same extent, nor in a similar fashion, current globalization. Driven by ‘regionalism’ among homogeneous blocks (in particular among the European Union member states and between the EU and the United States) ‘competitive internationalization’ is arguably the most salient feature of globalization at the end of the 20th century.
RESOURCE FLOWS WITHIN MULTINATIONAL CORPORATIONS: IMPLICATIONS FOR SUBSIDIARY STRATEGY
Jiatao Li and Trond Randøy
Built on the network conceptualization of the multinational corporation (MNC) in the literature, this paper explores three sets of intra-MNC resource flows that facilitate global integration: capital, knowledge, and product flows. By considering both the direction and intensity of the resource flows, this paper presents a framework for analyzing the strategic roles of foreign subsidiaries. We explore this framework with data on U.S. subsidiaries of foreign companies in 46 manufacturing and service industries and 24 MNC home countries. Differences in subsidiary roles are analyzed along two dimensions: the extent to which the subsidiary is a provider of resources to, or a user from, the MNC network. The results provide strong support for differentiated subsidiary roles in relation to the direction and intensity of intra-MNC resource flows. This framework provides managers with better understanding of global integration across subsidiaries.
FOREIGN DIRECT INVESTMENT BY KOREAN FIRMS: PROFILE, THEORY, AND IMPLEMENTATION
Sang Hoon Nam and Tim Craig
This research investigates the current state of foreign direct investment by firms from South Korea. Korean FDI is found to be increasingly diverse in location and purpose; small and medium sized firms are investing primarily in Asia in search of cheap labor, while large firms are investing in major markets worldwide to secure market share and to acquire and develop technology. The applicability of Dunning’s eclectic theory to Korean FDI is discussed, and theoretical refinements concerning ownership advantages are suggested. Implementation challenges involve HRM, and vary according to whether the labor an investment requires is commodity-like or skilled.
GOVERNMENT PRIVATIZATION STRATEGIES IN EMERGING ECONOMIES: WHETHER TO GO OR ALL OF THE WAY
Jonathan P. Doh and Hildy J. Teegen
This research investigates the current state of foreign direct investment by firms from South Korea. Korean FDI is found to be increasingly diverse in location and purpose; small and medium sized firms are investing primarily in Asia in search of cheap labor, while large firms are investing in major markets worldwide to secure market share and to acquire and develop technology. The applicability of Dunningâ€™s eclectic theory to Korean FDI is discussed, and theoretical refinements concerning ownership advantages are suggested. Implementation challenges involve HRM, and vary according to whether the labor an investment requires is commodity-like or skilled.
PROPERTY RIGHTS IN COMMON, FROM COMMUNES TO TOWN AND VILLAGE ENTERPRISES IN RURAL CHINA
Malcolm Cone, Zhilong Tian and André M. Everett
We investigate factors that contribute to governmental decisions to fully versus partially privatize stateowned infrastructure services. Drawing from financial economics and strategic management, we develop a model of the decision to partly or fully privatize a given state-owned asset. Using a proprietary database of telecommunications projects in emerging economies, we find that governments are more likely to fully privatize in countries with higher per capita income and lower existing telecommunications infrastructure penetration, and in countries that have made substantial international investment commitments. We also find full privatizations more prevalent in projects associated with local (versus national or international) phone service. The overall findings support a strategic choice perspective of governmentsâ€™ use of privatization as a vehicle to accelerate economic development in technology-intensive industries.
LEVEL OF CONTROL, STAFFING POLICY, AND TRAINING NEEDS FOR OVERSEAS UNITS OF MULTINATIONAL CORPORATIONS: AN INTEGRATIVE APPROACH
Hoon Park, Youngsun Paik and Cristina Suarez Duffy
The paper is an investigation of the emergence of town and village enterprises (TVE) in rural China. Part one investigates the antecedents of the TVE phenomenon, adopting the dual perspectives of macro economic policy (especially the household responsibility system) and the role of culture as explanatory paradigms. Part two is a case study of a successful TVE that shows the effects of economic policies and culture on a single organization in rural Hubei Province.
ECONOMIC REFORM IN THE PEOPLES REPUBLIC OF CHINA: RESUSCITATION OR TRANSFORMATION
Richard Fey and Alan Zimmerman
This paper suggests an integrative model in which MNCs combine staffing policy with training requirements given the level of control over foreign operations. The main premise of the paper is that different levels of control need determine the type of personnel and the extent of training required for managing foreign operations. At the highest level of control need, expatriate managers are provided with extensive cultural training. Conversely, at the lowest level of control need, host country nationals are given minimal functional training. When the control needs are moderate, firms can select either expatriates or host country nationals. Since the costs incurred in extensive functional training for host country nationals are usually greater than those for expatriates who require only a minimal level of cultural training, MNCs tend to prefer expatriates to host country nationals.